Advanced Search
MyIDEAS: Login to save this paper or follow this series

An overview of salient factors, relationships and values to support integrated energy-economic systems dynamic modelling

Contents:

Author Info

  • Martin de Wit

    ()
    (School of Public Leadership, University of Stellenbosch)

  • Matthew Kuperus Heun

    ()
    (Engineering Department, Calvin College)

  • Douglas J Crookes

    ()
    (Independent Researcher)

Abstract

Integrated energy-economic modeling is needed to support the development of energy and carbon policies. We propose that a systems dynamic modeling approach is needed; one that includes (a) dynamics (b) endogenous treatment of uncertainty and risks, and (c) both aggregate economic and disaggregate technical or engineering levels of analysis. To support the future development of integrated energy-economic models we review and organise the literature on energy-economy interactions into subsections covering (a) the key factors or components, (b) the relationships among these components, (c) a quantification of parameters and (d) implications for the development of an integrated energy-economic systems dynamic model. The literature is organized in discussions on economic growth and the factors of production, elasticities, macro- and technical substitutability, energy cost shares, heat engine efficiencies and energy services efficiencies. We observe non-linear relationships in production and consumption, large variations among price and income elasticity values across time frames, across countries and regions, and across energy goods, far from perfect substitution among factors of production and among energy goods on a macro level, technical/engineering limits to substitution on a micro level, as well as engineering and behavioural limits on what can be achieved with increased efficiencies. We therefore support the call to develop integrated energy-economic systems dynamic models that are able to provide new insight into the nature of energy-economic transitions

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://www.ekon.sun.ac.za/wpapers/2013/wp022013/wp-02-2013.pdf
File Function: First version, 2013
Download Restriction: no

Bibliographic Info

Paper provided by Stellenbosch University, Department of Economics in its series Working Papers with number 02/2013.

as in new window
Length:
Date of creation: 2013
Date of revision:
Handle: RePEc:sza:wpaper:wpapers178

Contact details of provider:
Postal: Private Bag X1, 7602 Matieland
Phone: 021-8082247
Fax: +27 (0)21-808 2409
Email:
Web page: http://www.ekon.sun.ac.za
More information through EDIRC

Related research

Keywords: energy-economic modeling; system dynamics; elasticities; economic substitution; technical substitution; energy efficiency; energy cost share; heat engine efficiency;

Find related papers by JEL classification:

This paper has been announced in the following NEP Reports:

References

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
as in new window
  1. Balistreri, Edward J. & McDaniel, Christine A. & Wong, Eina Vivian, 2003. "An estimation of US industry-level capital-labor substitution elasticities: support for Cobb-Douglas," The North American Journal of Economics and Finance, Elsevier, vol. 14(3), pages 343-356, December.
  2. David Stern, 2011. "Elasticities of substitution and complementarity," Journal of Productivity Analysis, Springer, vol. 36(1), pages 79-89, August.
  3. Delucchi, Mark A. & Jacobson, Mark Z., 2011. "Providing all global energy with wind, water, and solar power, Part II: Reliability, system and transmission costs, and policies," Energy Policy, Elsevier, vol. 39(3), pages 1170-1190, March.
  4. Acemoglu, Daron & Aghion, Philippe & Bursztyn, Leonardo & Hemous, David, 2010. "The Environment and Directed Technical Change," Seminar Papers 762, Stockholm University, Institute for International Economic Studies.
  5. Edwin van der Werf, 2007. "Production Functions for Climate Policy Modeling: An Empirical Analysis," Kiel Working Papers 1316, Kiel Institute for the World Economy.
  6. David I. Stern, 2012. "Interfuel Substitution: A Meta‐Analysis," Journal of Economic Surveys, Wiley Blackwell, vol. 26(2), pages 307-331, 04.
  7. Sorrell, Steve, 2009. "Jevons' Paradox revisited: The evidence for backfire from improved energy efficiency," Energy Policy, Elsevier, vol. 37(4), pages 1456-1469, April.
  8. Ramcharran, Harri, 2002. "Oil production responses to price changes: an empirical application of the competitive model to OPEC and non-OPEC countries," Energy Economics, Elsevier, vol. 24(2), pages 97-106, March.
  9. Avi J. Cohen, 2003. "Retrospectives: Whatever Happened to the Cambridge Capital Theory Controversies?," Journal of Economic Perspectives, American Economic Association, vol. 17(1), pages 199-214, Winter.
  10. Warr, Benjamin & Ayres, Robert & Eisenmenger, Nina & Krausmann, Fridolin & Schandl, Heinz, 2010. "Energy use and economic development: A comparative analysis of useful work supply in Austria, Japan, the United Kingdom and the US during 100Â years of economic growth," Ecological Economics, Elsevier, vol. 69(10), pages 1904-1917, August.
  11. Romer, Paul M, 1986. "Increasing Returns and Long-run Growth," Journal of Political Economy, University of Chicago Press, vol. 94(5), pages 1002-37, October.
  12. Daly, Herman E., 1997. "Georgescu-Roegen versus Solow/Stiglitz," Ecological Economics, Elsevier, vol. 22(3), pages 261-266, September.
  13. Berkhout, Peter H. G. & Muskens, Jos C. & W. Velthuijsen, Jan, 2000. "Defining the rebound effect," Energy Policy, Elsevier, vol. 28(6-7), pages 425-432, June.
  14. Dahl, Carol A., 2012. "Measuring global gasoline and diesel price and income elasticities," Energy Policy, Elsevier, vol. 41(C), pages 2-13.
  15. Bretschger, Lucas, 2005. "Economics of technological change and the natural environment: How effective are innovations as a remedy for resource scarcity?," Ecological Economics, Elsevier, vol. 54(2-3), pages 148-163, August.
  16. Sjak Smulders, 1995. "Entropy, environment, and endogenous economic growth," International Tax and Public Finance, Springer, vol. 2(2), pages 319-340, August.
  17. Tverberg, Gail E., 2012. "Oil supply limits and the continuing financial crisis," Energy, Elsevier, vol. 37(1), pages 27-34.
  18. David I. Stern, 1998. "A multivariate cointegration analysis of the role of energy in the U.S. macroeconomy," Working Papers in Ecological Economics 9803, Australian National University, Centre for Resource and Environmental Studies, Ecological Economics Program.
  19. Robert J. Barro, 2012. "Inflation and Economic Growth," CEMA Working Papers 568, China Economics and Management Academy, Central University of Finance and Economics.
  20. Roger Fouquet, 2010. "The Slow Search for Solutions: Lessons from Historical Energy Transitions by Sector and Service," Working Papers 2010-05, BC3.
  21. Schipper, Lee & Grubb, Michael, 2000. "On the rebound? Feedback between energy intensities and energy uses in IEA countries," Energy Policy, Elsevier, vol. 28(6-7), pages 367-388, June.
  22. David I. Stern, 2010. "The Role of Energy in Economic Growth," CCEP Working Papers 0310, Centre for Climate Economics & Policy, Crawford School of Public Policy, The Australian National University.
  23. Goulder, Lawrence H. & Schneider, Stephen H., 1999. "Induced technological change and the attractiveness of CO2 abatement policies," Resource and Energy Economics, Elsevier, vol. 21(3-4), pages 211-253, August.
  24. T. W. Swan, 1956. "ECONOMIC GROWTH and CAPITAL ACCUMULATION," The Economic Record, The Economic Society of Australia, vol. 32(2), pages 334-361, November.
  25. Edenhofer, Ottmar & Bauer, Nico & Kriegler, Elmar, 2005. "The impact of technological change on climate protection and welfare: Insights from the model MIND," Ecological Economics, Elsevier, vol. 54(2-3), pages 277-292, August.
  26. Anwar Shaikh, 2005. "Nonlinear Dynamics and Pseudo-Production Functions," Eastern Economic Journal, Eastern Economic Association, vol. 31(3), pages 447-466, Summer.
  27. Brandt, Adam R., 2010. "Review of mathematical models of future oil supply: Historical overview and synthesizing critique," Energy, Elsevier, vol. 35(9), pages 3958-3974.
  28. Gerlagh, Reyer & van der Zwaan, Bob, 2003. "Gross world product and consumption in a global warming model with endogenous technological change," Resource and Energy Economics, Elsevier, vol. 25(1), pages 35-57, February.
  29. John Hartwick, 1976. "Intergenerational Equity and the Investing of Rents from Exhaustible Resources," Working Papers 220, Queen's University, Department of Economics.
  30. Warr, Benjamin & Ayres, Robert U., 2012. "Useful work and information as drivers of economic growth," Ecological Economics, Elsevier, vol. 73(C), pages 93-102.
  31. Suleiman, Sa’ad & Muhammad, Shahbaz, 2012. "Price and Income Elasticities of Demand for Oil Products in African Member Countries of OPEC: A Cointegration Analysis," MPRA Paper 37390, University Library of Munich, Germany, revised 28 Feb 2012.
  32. Lindenberger, Dietmar & Kuemmel, Rainer, 2011. "Energy and the State of Nations," EWI Working Papers 2011-11, Energiewirtschaftliches Institut an der Universitaet zu Koeln.
  33. Edward J. Balistreri & Christine A. McDaniel & Eina Vivian Wong, 2003. "An Estimation of U.S. Industry-Level Capital-Labor Substitution," Computational Economics 0303001, EconWPA.
  34. Manne, Alan & Mendelsohn, Robert & Richels, Richard, 1995. "MERGE : A model for evaluating regional and global effects of GHG reduction policies," Energy Policy, Elsevier, vol. 23(1), pages 17-34, January.
  35. Kemfert, Claudia, 1998. "Estimated substitution elasticities of a nested CES production function approach for Germany," Energy Economics, Elsevier, vol. 20(3), pages 249-264, June.
  36. Marcelle Chauvet & Jack G. Selody & Douglas Laxton & Michael Kumhof & Jaromir Benes & Ondra Kamenik & Susanna Mursula, 2012. "The Future of Oil," IMF Working Papers 12/109, International Monetary Fund.
  37. Ayres, Robert U. & Warr, Benjamin, 2005. "Accounting for growth: the role of physical work," Structural Change and Economic Dynamics, Elsevier, vol. 16(2), pages 181-209, June.
  38. Ayres, Robert U. & van den Bergh, Jeroen C.J.M., 2005. "A theory of economic growth with material/energy resources and dematerialization: Interaction of three growth mechanisms," Ecological Economics, Elsevier, vol. 55(1), pages 96-118, October.
  39. David I. Stern and Astrid Kander, 2012. "The Role of Energy in the Industrial Revolution and Modern Economic Growth," The Energy Journal, International Association for Energy Economics, vol. 0(Number 3).
  40. Koesler, Simon & Schymura, Michael, 2012. "Substitution elasticities in a CES production framework: An empirical analysis on the basis of non-linear least squares estimations," ZEW Discussion Papers 12-007, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
  41. Jacobson, Mark Z. & Delucchi, Mark A., 2011. "Providing all global energy with wind, water, and solar power, Part I: Technologies, energy resources, quantities and areas of infrastructure, and materials," Energy Policy, Elsevier, vol. 39(3), pages 1154-1169, March.
  42. Michael Kumhof & Dirk Muir, 2012. "Oil and the World Economy," IMF Working Papers 12/256, International Monetary Fund.
  43. Xepapadeas, Anastasios, 2005. "Economic growth and the environment," Handbook of Environmental Economics, in: K. G. Mäler & J. R. Vincent (ed.), Handbook of Environmental Economics, edition 1, volume 3, chapter 23, pages 1219-1271 Elsevier.
  44. Lindenberger, Dietmar & Kümmel, Reiner, 2011. "Energy and the state of nations," Energy, Elsevier, vol. 36(10), pages 6010-6018.
Full references (including those not matched with items on IDEAS)

Citations

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:sza:wpaper:wpapers178. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Melt van Schoor).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.